Kerala, Karnataka Cooperatives Clash Over Cross-Border Milk Sales

A dispute has emerged between Kerala’s Milma and the Karnataka Milk Federation (KMF) over the expansion of KMF’s Nandini milk sales in Kerala. Milma has petitioned the National Cooperative Dairy Federation of India and central agricultural authorities, seeking action against what it describes as KMF’s direct retail expansion in the State.

KMF has established Nandini retail kiosks and fluid-milk distribution channels in locations including Kochi, Manjeri and Tirur. Milma and Kerala dairy authorities have raised concerns that the expansion affects local cooperative organisations and changes the established pattern of inter-state cooperation between state dairy federations.

At the centre of the dispute is the difference in pricing conditions between the two states. According to Milma’s position, Karnataka provides production incentives and subsidies to its major milk producers, allowing Nandini to offer liquid milk at prices that can be lower than Milma’s pasteurised milk pouches. Milma argues that this creates additional competitive pressure on Kerala’s cooperative network, which also has to support local milk producers.

Cross-border movement of milk between the two states had traditionally been more limited, with state cooperatives generally supplying milk across borders for institutional requirements, seasonal shortages or periods of higher demand. Milma itself has previously procured bulk milk supplies from KMF and Tamil Nadu’s Aavin during periods of shortage, including the Onam season.

The latest disagreement has emerged as KMF moves beyond such limited supply arrangements towards permanent retail outlets targeting individual consumers in Kerala. This has brought the two state cooperatives into more direct competition in the retail market.

The development reflects a broader shift within India’s cooperative dairy sector. State federations are expanding processing capacity and looking for markets beyond their traditional geographical boundaries, while simultaneously seeking to maintain procurement and income support for their farmer members.

For the dairy industry, the Kerala-Karnataka dispute highlights the growing importance of inter-state milk trade, procurement economics, subsidies and retail pricing as state dairy cooperatives expand their market presence beyond their home territories.

Source: Dairynews7x7 17 Sep, 2026 Read full story here

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